§ 4. Mr. Mackinlay
To ask the Chancellor of the Exchequer what proposals he has to promote and encourage economic confidence. 
§ The Financial Secretary to the Treasury (Mr. Michael Jack)
The Government's policies are increasing confidence by creating the right conditions for sustainable growth through low inflation, sound public finances and a continuing programme of structural reform.
§ Mr. Mackinlay
That is all very interesting, but does the Minister not realise that his complacent attitude will be received with dismay and anger by the millions of people who are languishing in the frustration of negative equity, who cannot sell their homes to take jobs elsewhere in the country because no one is prepared to purchase their homes? Many of them are people who have not got jobs and people who are not sure about their employment prospects. People are not prepared to invest in homes because they have no confidence. What is the Minister going to do about the great burden of negative equity that faces many of the constituents of my hon. Friends, and 320 many of the constituents of Conservative Members—people who voted for them at the last general election, especially in the south-east of England?
§ Mr. Jack
Wait for it. The best news comes a little later in my presentation. The Halifax building society's report said that it saw a recovery in the housing market and increasing prices. On our part, my right hon. and learned Friend the Chancellor announced a reduction in interest rates, creating the lowest mortgage level for 30 years. In case the hon. Gentleman was half asleep at Christmas, that was good news for those who want movement in the housing market.
§ Mr. Nicholas Winterton
Although I accept much of what my hon. Friend has just said, does he accept that, to regenerate economic confidence, it is important to regenerate the housing market? Although he was right to say that the Halifax building society sees a modest rise in house prices and anticipates an increase in house prices next year, last year's figures show that house prices decreased by 1 per cent. on the previous year. Will he therefore press the Chancellor yet again to ignore Mr. Eddie George, the Governor of the Bank of England, and further reduce interest rates, which would bring about confidence not only in the housing market but industrially?
§ Mr. Jack
My hon. Friend advocates some important points. He will have noted that, at the last meeting between the Chancellor and the Governor of the Bank of England, when they jointly appeared at a press conference, they were in accord on a reduction in interest rates. I hope that my hon. Friend will not be entirely seduced by the Opposition, thinking that confidence is a single-club issue—that of the housing market. Important though it is, our economic policies are creating low inflation and the prospect of 3 per cent. growth next year, and unemployment is already down by more than 700,000. Those clear indicators of growing confidence in the British economy will cause business investment to grow by a further 9 per cent. this year.
§ Sir James Molyneaux
Does the Minister agree that confidence could be further restored by simplifying the methods of supplying grant assistance to relatively small companies, particularly those that employ fewer than 20 people? Might one of the instruments to do that be the enterprise investment scheme?
§ Mr. Jack
I am glad that the hon. Member—[HON. MEMBERS: "The right hon. Member."] I apologise to the right hon. Member. He mentioned the enterprise investment scheme, which is important as it enables those who wish to advance venture capital and seek an involvement in small, growing companies to realise the dream of growth in the small company sector. If the right hon. Gentleman has points that he would like to discuss, I should be happy to hear from him, because that important scheme is working well.
§ Mr. Forman
Is it not clear that economic confidence will be revived further and sustained provided that the 321 Government follow their current prudent fiscal policy and a cautious monetary policy? Is not the clearest evidence of the success so far the vote of confidence given by all the inward investors in this country, both direct and portfolio?
§ Mr. Jack
My hon. Friend is right. The Opposition have chastised us in recent months on league tables but they do not like to talk about the fact that the United Kingdom is top of the league table for inward investment. We are confident of our economic policies because we can answer questions about interest rates, growth and employment. The hon. Member for Thurrock (Mr. Mackinlay) should consider the fact that his party is incapable of answering any economic question on any aspect.
§ Mr. Andrew Smith
The Financial Secretary and his right hon. and hon. Friends should turn their minds to the reason why there are 1 million fewer people in jobs than there were when his right hon. Friend became Prime Minister. At a time when one in five households of working age have no one bringing in a wage, what effect will it have on confidence now to abolish the community action programme, denying help to long-term unemployed youngsters, who need it most? Is that not typical of the Conservative party, creating a divided Britain and denying the long-term unemployed a stake in society?
§ Mr. Jack
The hon. Gentleman has failed to notice the many efforts that the Government have made to help people, such as jobseekers' programmes and education, to equip them for the world of work, and the fact that, under our economic policies, 700,000 people have left the unemployment register. It is about time that the hon. Gentleman considered his constituency and the success of the Rover car company in Cowley. That company has been recruiting about 4,000 new employees and is making about £200 million of new investment. That is the key to lasting prosperity. Let the hon. Gentleman look in his own back yard for an answer to his question.
§ Mr. Evennett
Is my hon. Friend aware that businesses, pensioners and families all appreciate low inflation, which the Government have achieved? Further, does my hon. Friend agree that the greatest threat to economic confidence in this country would be the election of a Labour Government?
§ Mr. Jack
I entirely agree with my hon. Friend the Member for Erith and Crayford (Mr. Evennett), and I will tell the hon. Member for Thurrock what the people are saying in that constituency. They are saying that they understand that the Government have sound economic policies and that the Government can ask the searching economic questions, unlike the Opposition, who fail ever to answer any question about what they would do about interest rates, and about what their economic and tax policies are. The Labour party is the party of "don't know"; we are the party that does know, and we know that we have the confidence of the British people on economic policy.